AT&T Ordered to Fix Knoxville, Tenn. PEG Channel’s Encoders

The Tennessee Regulatory Authority ordered AT&T, the provider of the cable television service U-Verse in Tennessee, to replace faulty encoder equipment that AT&T supplied to the City of Knoxville’s public, education and government channel, but which AT&T refused to repair or replace. In June 2012, two of three encoders AT&T supplied to Knoxville Community Television failed halting the PEG channel’s broadcasts over U-Verse, according to the complaint filed with the TRA by Knoxville. “AT&T U-verse stopped transmitting those PEG channels to their subscribers, apparently because of the failure of the encoder device provided by AT&T to CTV,” says the complaint, which is signed by Ronald Mills, Knoxville’s deputy law director. The city then notified AT&T of the equipment failure in a letter dated June 1, 2012, the complaint said. However, “AT&T has taken the position” it has complied with the requirements of the Tennessee Competitive Cable and Video Services Act of 2008 “because it provided CTV with the equipment necessary to transmit PEG signals to AT&T…along with a 90-day warranty on that equipment,” therefore “it is no longer obligated to bear the expense of transmission of the PEG channels,” the complaint said. In addition, the city argued, “there is no limiting language” in the TCCVSA that makes the obligation imposed on video providers by state regulations “a one-time obligation.” Rather, “there is a continuing obligation of a state-franchised cable and video service provider to transmit activated PEG channels, the obligation to bear the on-going expenses of such transmission should and does, under the unambiguous language of the statute, fall on the cable and video service provider, as well.” AT&T’s response disputed Knoxville’s claim that the existing statute “requires video providers to pay the cost of repairing equipment in the exclusive control and possession of the local governments.” AT&T argued the statute “reasonably places repair costs with the party that actually possesses and controls the equipment.” Nonetheless, on Jan. 7, 2013 the TRA ruled, “AT&T is under a continuing duty to provide working alteration equipment to the local governments and has not done so,” it is in “violation of the PEG requirements.” Therefore, “AT&T must repair or replace the defective encoding equipment no later than 30 days” of the date of the ruling, or the company will be fined $1,000 per day up to $10,000, TRA said.

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